JPMorgan Chase & Co. (JPM): A Bull Case Theory

Published on August 4, 2025 at 1:34 pm by Ricardo Pillai in News, Stock Analysis

We came across a bullish thesis on JPMorgan Chase & Co. on Long-term Investing’s Substack by Sanjiv. In this article, we will summarize the bulls’ thesis on JPM. JPMorgan Chase & Co.’s share was trading at $298.62 as of July 25^th. JPM’s trailing and forward P/E were 15.31 and 15.92 respectively, according to Yahoo Finance.

An executive in a suit walking across the lobby of a modern commercial bank.

JP Morgan (JPM) reported another quarter of robust results, reflecting strong performance across all three business segments—Consumer and Community Banking, Commercial and Investment Banking, and Asset and Wealth Management—against a backdrop of a weaker U.S. dollar and postponed tariff risks. Q2 2025 revenue was $42 billion, down 12% year-over-year due to non-recurring accounting gains in the prior year, while underlying revenues grew at a single-digit pace. Net income reached $15 billion with ROTCE at 21%.

Consumer and Community Banking revenue rose 6% to $18.8 billion, driven by 15% growth in card services and auto. Commercial and Investment Banking revenue climbed 9% to $19.5 billion, led by a 15% surge in Markets, broad-based gains across fixed income and equities, and improved underwriting fees. Asset and Wealth Management grew 10% to $5.8 billion, benefiting from net inflows of $31 billion and higher market levels.

Management emphasized a “fortress balance sheet,” with CET1 capital at 15.1% and significant excess regulatory capital that could be unlocked if Basel III rules are relaxed, enabling faster capital returns via dividends and buybacks. While credit conditions remain benign and all segments are firing on “all cylinders,” management cautioned about cyclical risks, trade uncertainty, and elevated asset prices.

Trading revenues were notably resilient, bolstered by deliberate capital deployment. At $292 per share, JPM trades at 14.6× forward earnings with a 6.8% earnings yield and 2.1% dividend yield. Prospective returns are seen at 7–10% annually over 5–7 years. Despite regulatory headwinds, JPM remains best-in-class, supported by its scale, strong capital position, and capacity for capital returns, though management is reluctant to repurchase stock near three times tangible book.

Previously, we covered a bullish thesis on JPMorgan Chase & Co. by Pacific Northwest Edge in March 2025, which highlighted JPM’s systemic importance, efficient capital deployment, and long-term compounding ability. The stock has appreciated about 25% since our coverage, as earnings and credit quality stayed strong. The thesis remains valid, and Sanjiv shares a similar view but stresses record earnings, segment growth, and regulatory-driven capital returns.